The latest round of a trade war that started nearly three years ago over Chinese silicon solar panels imported in the United States will likely have a far more financial impact than before. In fact, prices for Chinese solar panels could go up 14% on average, said a report released Thursday.

That price hike will be hard to avoid and cause Chinese companies to lose much of the advantage they have enjoyed for years: the ability to make and sell solar panels at costs far lower than their competitors elsewhere in the world, according to an analysis by GTM Research. The report is taking stock of the ongoing trade case undertaken by the U.S. Department of Commerce, which issued a preliminary decision on June 3 that set tariffs at 19% to 35%. It plans to make a final decision in August.

China is the solar manufacturing hub of the world. It supplied 31% of the solar panels installed in the United States last year, GTM said. The vast majority of the solar panels made in China use silicon solar cells. The commerce department pegged the value of the Chinese silicon solar panels that entered the U.S. market at around $1.5 billion.

Some solar installers and project developers aren’t waiting for the government to wrap the case before figuring out its supply strategies. Two days after the commerce department handed down the provisional tariffs, SolarCity announced that it had agreed to buy between 100 and 240 megawatts of solar panels from Norway-based REC Group. And here is a telling quote from that press release:

“The availability of competitively priced, U.S. trade-compliant PV modules is an important development for the global solar industry,” said Tanguy Serra, chief operations officer of SolarCitySolarCity. “REC delivers high-performance modules with excellent resistance to degradation, all with a responsible environmental footprint.”

The company didn’t stop there. Earlier this week, SolarCity made a surprise announcement to become a solar panel maker by buying a startup, Silevo, that has developed a hybrid solar cell technology and a manufacturing process that promises to deliver low-cost cells that can convert a higher percentage of sunlight into electricity.

Making its own solar panels — the plan is to build a giant factory in New York — will give SolarCity a greater control over its supply and protect it from price fluctuation that can vary greatly as a result of trade disputes or market forces governing supply and demand.

The New Fight

The latest round of trade dispute still centers on whether Chinese solar manufacturers have received unfair subsidies from the Chinese government that then allow them to sell their products at below fair market value. But the result will likely to be very different than the last go-around, GTM said.

The first round of trade battle started in October 2011 by a group led by SolarWorld. When the government concluded its investigation in 2012, it imposed tariffs that reached 250% on the high end.

But those tariffs from 2012 turned out to be easy to circumvent. They targeted silicon solar cells made in China, not the raw materials and components that go into making the cells or the panels in which the cells are assembled. What many Chinese manufacturers, some of whom make their own materials and components for solar cells, ended up doing was to buy silicon solar cells from Taiwan. They still used materials made in China and kept the panel assembly in-house.

The SolarWorld-led group subsequently filed a new complaint after realizing that their effort didn’t inflict the intended pain or achieve what they hoped would be fair competition. The new complaint covers the components that go into solar cells, as well as the solar panels.

What To Do This Time?

This time around, Chinese manufacturers could pay the tariffs and ship all-China made products, or they could build factories or hire manufacturers outside of China, GTM said.

Whatever strategies they use, they will likely have to sell their products at a higher price if the commerce department doesn’t lower the tariffs in its final decision. That price hike will likely range from 7% to 20% (average 14%), GTM said.

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In a short term, it is not good to Chinese players. In a long term, it is good to Chinese players to spped up the consolidation and shorten the paid of oversupply. According to PVinsights, www.pvinsights.com , lots of Chinese solar players shall be out of solar market in the coming years.